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Nutreco to Sell Spanish Meat and Feed Business

GLOBAL - Animal nutrition, fish feed and meat processor Nutreco is to sell of its compound feed and meat operations in Spain and Portugal

The move together with a growth in the company’s global products is designed to bring Nutreco closer to its core growth segments Animal Nutrition and Fish Feed.

To speed up the progress of driving sustainable growth, the company is to restructure.

Nutreco said the new structure will enhance the company’s key strategic drivers of innovation, partnerships and building up a portfolio of higher value-added nutritional solutions.

“These changes are a logical step to enhance our worldwide leadership position in animal nutrition and fish feed,” the company said.

It added that fundamental in the new structure are key functional areas such as innovation, partnership management, strategic marketing, sourcing and human resources anchored globally.

The business structure will consist of two global business units (Salmon Feed and Feed Additives) and three regional business units (Americas, Asia and EMEA) that are designed to provide enough scale and execution power to accelerate growth into new markets.

The Executive Board will consist of CEO Knut Nesse and CFO Gosse Boon. In addition to the CEO and CFO, the new Executive Committee will consist of the business unit managing directors Martijn Adorf (BU Feed Additives), Steven Rafferty (BU Salmon Feed), Hugues LeRuz (BU Americas), Harm de Wildt (BU EMEA) and the Managing Director for BU Asia (to be announced shortly), as well as Viggo Halseth (Chief Innovation Officer) and Nalin Miglani (Chief Human Resources & Corporate Development Officer).

Knut Nesse, CEO of Nutreco said: "After careful consideration we intend to divest a large part of our non-core businesses.

“As part of this process and in response to the market reality we have reviewed our business opportunities.

“Accordingly our organisational and management structure will be adjusted.

“The new top structure better aligns our strategic priorities and provides better execution power. Innovation is our key growth driver and will help us to fulfil our mission 'Feeding the Future'.

“As a consequence we have established a Chief Innovation Officer function responsible for driving the innovation agenda, building strategic partnerships and improving strategic marketing.

“I am very pleased that Viggo Halseth has accepted this important new role; he is one of our most experienced managers with a career of 30 years in Nutreco.

“I am confident that the new organisational structure of Nutreco will provide a strong foundation to bring us sustainable growth in the years ahead."

Changes to Executive Board

As a result of the new top structure, the Supervisory Board and Jerry Vergeer, Executive Board member and COO Animal Nutrition, have mutually agreed that he will step down from the Executive Board from 6 February 2014 and will leave Nutreco on 1 July 2014.

Viggo Halseth, COO Aquaculture will also step down from the Executive Board on 6 February 2014 and will become Chief Innovation Officer and member of the Executive Committee.

New Business and Market Reality

The company said that the divestment of the compound feed and meat businesses in Spain and Portugal enhances Nutreco's focus on the core growth segments Animal Nutrition and Fish Feed.

The company said that the long term growth trends for these segments are favourable.

“In a world with limited natural resources and a growing population, there is a rising demand for high quality meat, milk, eggs, fish and shrimp. Nutreco will be the global leader in innovative and sustainable nutritional solutions that best support the performance of animals, fish and shrimp,” the company said.

The long term average organic growth rate in Fish Feed is approximately five per cent per annum.

However for the short term the revenue growth may be tempered due to the decision made by Nutreco's largest salmon feed customer Marine Harvest to invest in feed capacity in Norway.

Nutreco aims to maintain its global market leadership in salmon feed but also diversifies into feed for other fish species in order to reduce its dependency on the salmon feed market.

Nutreco said its ambition is to also grow through value creative acquisitions and added that it remains committed to a financially disciplined execution of this strategy.It concluded that there are less sizeable value creative acquisitions than foreseen.

In the new structure Nutreco said it will focus on organic growth driven by innovation and partnerships and will continue to pursue value-creative acquisition opportunities.

Solid Results in Challenging Market

In the 2013 financial year, Nutreco achieved EBITA of €256 million, in line with the company’s third quarter forecast.

Revenue from continuing operations rose by 1.2 per cent to € 3,867.1 million and full year EBITA from continuing operations before exceptional items fell by 4.3 per cent to € 215.7 million, mainly due to eight per cent lower results in Fish Feed

Animal Nutrition EBITA margin improved to 6.1 per cent compared to 5.9 per cent in 2012 due to focus on higher value-added nutritional solutions.

Mr Nesse said: "This year was a respectable one for Nutreco and we delivered solid results in a challenging market. In line with the Q3 outlook we achieved a total EBITA of € 256 million, which is, although slightly lower than 2012, the second best operating result in the history of the company.

“Our results in 2013 were impacted by a number of factors, including high commodity prices impacting the profitability of our customers, lower results in Fish Feed, especially in Norway and China, as well as an adverse foreign currency impact. At the same time we were able to regain our global market leadership position in salmon feed and we improved our margins in Animal Nutrition.

“After careful consideration of all available options it was decided that the divestment of the compound feed and meat businesses in Spain and Portugal provides the best future opportunities for these businesses and Nutreco.

“With the intended divestment we increase our focus on premix, feed specialties and fish feed, completely in line with our strategy.

“The acquisition of Gisis in Ecuador takes Nutreco to the global top three shrimp feed producers.

“The acquisition of Hendrix Misr in Egypt expands our footprint in Africa, where we intend to grow further. Both acquisitions fit in with our strategy to expand in growth geographies.

“Nutreco will continue to support innovation which we believe is essential to meeting the challenges ahead.

“All new Nutreco innovations are developed to achieve high nutritional value, sustainable production and economic performance as we seek to fulfil our mission of 'Feeding the Future'.

“ I'm confident that the strategic actions taken in 2013 have prepared Nutreco to execute our strategy and will bring us sustainable growth in the years ahead. As usual we will give an outlook for the first half year of 2014 at our Q1 trading update on 24 April."